Selling real estate in Cyprus can be complicated not only by the contract itself, but by the issue of receiving funds. This is especially true when the seller lives outside of Cyprus, does not have a valid Cypriot bank account, and the buyer is purchasing the property with a bank loan.

At first glance, everything seems simple: the parties have agreed on a price, signed a contract, the buyer is ready to pay, and the bank is ready to issue a loan. But at the final stage, a practical problem arises: the buyer's bank must issue the funds, the buyer must transfer the property into their name, and the seller must be confident that payment will actually be received.

If the seller does not have an account in Cyprus, this process may stop.

Why the lack of a Cypriot bank account is becoming a problem

In a typical real estate sale, the buyer wires the seller money or delivers a bank check when the property is transferred. However, if the buyer uses a bank loan, their bank typically oversees the completion of the transaction.

The buyer's bank must ensure that after payment, the property will be transferred to the buyer and the bank's mortgage will be registered. Therefore, the bank is often unwilling to simply transfer the funds to any foreign bank account held by the seller.

This creates a risk for the seller. They don't want to sign the title deeds until they understand exactly how and when they'll receive the money. The buyer's bank, in turn, doesn't want to issue credit without control over the transaction.

This creates a situation in which there is already a contract, a buyer, and a bank, but the transaction cannot be completed technically.

When a pre-planned payment plan is especially needed

Problems most often arise in the following cases:

the seller does not have a bank account in Cyprus;

the seller lives outside the European Union;

the buyer acquires real estate with the help of a mortgage loan;

the buyer's bank is ready to pay for the transaction by bank check;

the seller cannot accept the check directly;

funds after the sale must be transferred outside of Cyprus;

the bank requires additional explanations regarding the transaction and the origin of the funds;

Before re-registering real estate, it is necessary to obtain a tax certificate and other permits.

In such situations, it's important to agree in advance not only on the contract but also on the entire payment flow: who is paying, where it's going, what amounts are withheld, what expenses are paid before the re-registration, and where the remaining funds are transferred to the seller.

How a client account can help

One practical solution may be to use a client account with a regulated company or legal provider involved in the transaction.

A client account is used to receive, store, and distribute funds related to a specific transaction. This structure can be useful when the seller does not have their own Cypriot account and the buyer's bank wants to process payments in a controlled manner.

Funds may be received into the client's account, held until agreed terms are met, and then distributed as appropriate to the seller, tax authorities, municipality, real estate agent, lawyers, bank, or other recipients specified in the transaction documents.

This does not guarantee payment and does not replace the buyer's obligations. However, this structure helps the parties arrange a secure closing and avoid situations where the transfer of ownership and receipt of funds do not coincide.

Tax certificate and real estate re-registration

Before closing a transaction, the seller typically needs to prepare documents for the tax authorities and the Land Department. Depending on the property and the circumstances of the sale, a tax certificate, proof of no outstanding arrears, municipal certificates, sewer fee documents, and other supporting documents may be required.

If these questions are not prepared in advance, the transaction may be delayed even after the buyer and bank are ready to pay.

Therefore, when selling real estate in Cyprus, it is important to check in advance:

certificate of title;

the presence of a mortgage, restrictions or other encumbrances;

seller's tax liabilities;

municipal and communal debts;

terms of the purchase and sale agreement;

payment procedure and form of the last payment;

the ability to accept a bank check or bank transfer;

where the seller can receive the net amount after the transaction.

Complex cases require more than just a lawyer

In a standard transaction, standard legal support is sufficient. However, if the seller does not have a bank account in Cyprus, the buyer is financed by a bank, and the funds need to be transferred outside of Cyprus, another layer of questions arises: bank verification, confirmation of the origin of the funds, the transfer route, the servicing bank's requirements, and the practical feasibility of the seller receiving the funds.

In such cases, it's important not to wait until the property transfer date but to establish a working plan in advance. Sometimes, the seller may need to open an account in another country, prepare bank documents, confirm the source of funds, or explain the economic rationale for the transaction.

Such issues must be resolved before the parties come to the Land Department.

How we help

We help Cyprus property sellers assess in advance whether the transaction can be completed within the proposed structure, the payment process risks, and the necessary documents.

If the transaction requires the use of a client account, acceptance of a bank check, approval from the buyer's bank, or complex post-sale fund distribution, we can arrange for assistance through a regulated Cyprus group company.

Our goal is not only to explain to the client what documents are needed, but also to help develop a practical process for completing the transaction: from obtaining a tax certificate and obtaining approval from the bank to re-registering the property and receiving the seller's funds.

Main

If you're selling real estate in Cyprus and don't have a Cypriot bank account, don't wait until the last minute to arrange payment. The sooner you agree on the payment arrangements, the more likely it is that the transaction will close without delay.

This is especially important if the buyer takes out a bank loan and the final payment must be made by bank check or under the bank's control.

Practical support for such transactions, including the use of a client account, can be arranged through a regulated Cypriot company of the Arnos Group >> PPB INC LIMITED